punishes criminal acts, and third, most potent of all, is the check of selfinterest. As we all know, directors are always stockholders, frequently very large stockholders, and at times even the only stockholders. It will at once become evident that in managing the business as directors they are practically managing their own business. The director gains in wealth as the business prospers and loses directly as the business suffers. In short his personal gains and losses are dependent upon the results of the business ventures.

There is a further fact that should not be forgotten, and that is that stockholders at all times know whether dividends go up or down, or if the dividends are converted into an assessment. Here we have a reasonably close connection between self-interest and the conducting of a trust. But in spite of these checks upon directors we are painfully aware that trusts are frequently violated. It is not uncommon to note the milking of stockholders by the voting of inordinate salaries to particular individuals, and furthermore it is nothing unusual for a board of directors to wreck the corporation for the benefit of some outside business in which their interests are greater.

Many of us are looking forward to the day when the laws of the state will be so changed either in the restriction of the powers of the directors or by some other provisions, so that minority stockholders will receive their just due. In brief the tendency in private organization is rather in the line of curtailment of official power than in its extension. Taking now this method of private organization and applying it to municipal organization, what would we have? We would have the citizens as stockholders electing a board of directors known as the city council, in whose hands. likewise would be placed the entire management of the city. What are in this instance the checks against wrong doing? Exactly as in the case of the private corporation, we have the check of individual conscience and the fear of the criminal statutes. But when we have mentioned these checks we have practically mentioned all. The powerful check of identity of individual with corporate interests is absent. Although public officials as citizens are presumably stockholders yet it must be evident to all that their interest as such stockholders is so infinitely small as compared with their interests as individuals, that for all practical purposes it is a negligible quantity. In fact this method of organization would be exactly the same as though a private corporation were to elect its board of directors from non-stockholders, which to say the least, would be deemed an unsafe procedure. As a matter of fact the main reason stockholders have for trusting their directors lies in the fact that the directors are themselves interested in the business in a financial way. No man who has ever given governmental organization any serious thought would dream of organizing a city after this fashion. How to make the interests of the governing class

approach in identity that of the governed, has been the basis of discussion in all theories of government and constitutional conventions. The writing of many volumes has still left the question somewhat open.

But it becomes a matter of necessity that our cities be governed. What is to be done? So far bitter practical experience has dictated but one course, and that is, in the absence of those natural and automatic checks which maintain and are operative in private business, it has become a matter of absolute necessity to establish artificial checks. What is their character? First, when public officials are placed in power they are not given unlimited authority. On the contrary, they are directed to do only certain specific things and in a certain specific manner. This is generally known as the theory of delegated power. Second, as the connection. between officials and the people is extremely loose, as it almost approaches impossibility for citizens to check up with any degree of certainty the tremendous work carried on in municipal departments, in electing officers we endeavor to so arrange matters that officials will be a check one upon the other; or, in other words, we establish cross-checks. This method is generally spoken of as the theory of divided functions. Reading some of the statements issued today by some book men and doctrinaries one would be led to the belief that the theories of delegated powers and divided functions or "checks and balances" were obsolete, and no longer of consequence. Whereas in fact they find their roots deep in the nature of human beings and must exist until the human race has attained a far higher standard than at present prevails. Every private corporation of any magnitude whatever establishes in its routine the most complete system of checks and balances that it is possible for it to devise. Examined on the score of business principles, a commission government would find its analogy in a private business which elects its directors from non-stockholders though limiting their power. It would be hard indeed to find stockholders who would organize their business on any such basis. Analysis clearly shows that commission government has not its counterpart in private business organization, there being a material difference on a very vital point.

There is another cross-check in municipal administration that experience has demonstrated the wisdom of establishing. This has reference to the management of a city's debt. It has been found the prevailing practice of most cities to shirk a proper provision for the payment of its outstanding bonded debt in order to provide more spending money for current purposes. For example, a given outstanding debt might require an annual contribution to the sinking fund of $500,000. Examination into the workings of many cities will disclose that the administration instead of levying this sum would proceed to reduce it by $300,000. This would mean an extra $300,000 to spend with no corresponding increase in the tax rate. Or the administration might go further and prior to an election,

reduce the levy by $500,000 thus giving the extra $300,000 for spending money and at the same time actually reducing the tax rate. This is one of the easy and very common ways for throwing dust into the eyes of the people with no discomfort to the money spender. The people as a rule are innocent of any knowledge pertaining to sinking fund matters, and as the bonds themselves would not mature in the near future the scheme is a safe one for the officials in charge.

Refunding is also an easy and safe method for relieving officials from the need of economizing. This makeshift of riding on the sinking fund has proven a very tempting one, of which a great many cities have availed themselves. In Ohio this form of misfeasance was first brought to public notice some thirty-five years ago, in Cincinnati. As a result there was appointed in that city a board of sinking fund trustees who were given entire control of the liquidation of the city's debt. The law specifically prescribed that whatever the trustees certified as necessary to levy for interest and sinking fund purposes must be placed in the council tax levy ordinance first, in preference to any other item in the budget and for the full amount certified. Thus there was taken out of the hands of the regular administrative officers who levied money and spent it, the power of controlling interest and sinking fund levies. The cities of Columbus and Toledo shortly afterward followed the plan adopted by Cincinnati, and in 1902 when the general code of the state was formulated, the appointment of sinking fund trustees became a general law of the state applicable to all municipal organizations.

It must be clear to all that levies for interest and sinking fund purposes are current expense just as much as are police pay rolls. To shift them on future generations savors strongly of gross injustice. But we are told that if we adopt the commission government we will have none of these bad men in office. We will only have such men in control as will finance a city justly and in accordance with the moral code. Let us see. Take the city of Des Moines as an example. The figures here given are from the annual report for the year ending March 31, 1911. The bonded debt of this city, excluding the park purchase debt, is $1,256,000. The annual interest charge is $51,380. The computed annual sinking fund charge is $65,425 or a total annual charge for interest and sinking fund obligations of $116,805. Calculating in the usual manner, the accumulated sinking fund from the date of issue of each series up to 1911 and we arrive at a total of $455,935, which sum should appear in the sinking fund for application upon the principal of the outstanding debt. Add to this the $51,380, interest to be provided for and we have the grand total of $507,315. The Des Moines report does not contain the term "sinking fund," but instead the term "bond and interest fund," is used. This in the report is given as $68,487.23, which indicates a shortage in this department of $438,827.77.

Doubtless the major part of this shortage was inherited from the old administration, nevertheless it becomes an interesting question "What has the new government done in the line of correcting former errors, and making proper provision for the maintenance of the city's credit?" During the last eight years preceding 1908 the interest and sinking fund levies ranged between 3 mills and 4.5 mills or an average of 3.675 mills. During the years 1908, 1909 and 1910 the levies were 3.9, 1.3 and 2.6 mills respectively, or an annual average of 2.6 mills. In 1909 this levy was made so small that it fell far short of yielding even the current interest charge to say nothing of making the proper sinking fund provision. Unless the printed report for the year March 31, 1911, fails to correctly exhibit the financial administration of the new government, there is but one inference to be drawn, and that is that the new government like the old has systematically evaded its moral obligation, and is playing fast and loose with the city's credit. On a tax valuation of $19,551,000, the levy for interest and sinking fund purposes during 1910 should have been 5.9 mills instead of 2.6 mills.

In addition to this levy sound financial administration would make it imperative to levy in each year an additional amount in order that the inherited shortage would be gradually absorbed. Had this been done the tax rate of the new government would have very materially exceeded that of the old, a circumstance by the way that would hardly appeal to the officials in charge and especially in the face of an impending election. Now as the members of the new government are reputable men, how is this sort of administration to be explained? Simply on the score of certain traits in human nature which make themselves felt whenever time is ripe. When the city changed to the commission government great things were promised and great things were expected. The new officials endeavored to make good and in a manner that would be most apparent to the people. A new city hall, a handsome bridge and a beautiful river bank were among the most important results. great outlays. Extra money means extra taxes. among the great things promised or expected. citizens improved government manifests itself mainly in reduced tax burdens. The government was thus confronted with a problem. How to get the great things without increased taxes. In other words "how to have the cake and eat it too." This problem is old. It has been faced time and again by nearly every city in the country. Des Moines proceeded to solve it, and solve it it did, exactly as most other cities have solved it generations ago. The solution was easy. It consisted simply in diverting money into the hands of the spending department which should have been saved up against the principal of the debt. "Let our successors worry over the debts when they mature." This is an old maxim.

But great things mean Increased taxes were not As in the eyes of most

Not only has the new government failed to brace up and strengthen its savings account, but it has further aided in its depletion. In the administration of its debt, Des Moines compares very unfavorably with many other cities that have not had the advantage of being governed by a commission. Space does not permit of an examination into the details of many of the statements issued by commission governed cities. It will however be needful to say that many of their methods in every day work hailed and applauded as wonderful improvements are either old in many other cities or are crude and adapted to small town conditions only. From the foregoing statement it will be noted that cross-checks are of some use even in cities governed by commission.

Glancing over the pamphlets issued by the commission government propaganda, prominent among the benefits promised we find the following: "It insures honest and economical government." It does not take much of an expert to detect the fallacy of any such claim. No government whatever, no matter what its forms, will insure honest and efficient government, for no matter what the form of government may happen to be, it must be administered by human beings, and as long as they are fallible the results will fall short of what is desired. We have well nigh perfect systems of accounting, but as long as your bookkeeper is negligent, incompetent or dishonest your results will be correspondingly deficient. The counties in the state of Ohio and perhaps in many other states have for generations been governed by a commission of three members elected at large exercising large legislative and executive powers. Up to the present time no one has ever noticed any particularly brilliant results attending their efforts.

In the planning of a city government it is not wise to have in view ideal men, nor the more than ordinarily good men that come into office at those spasmodic times when the public is temporarily aroused. Rather must we have in view that average class of citizens which will control when affairs have returned to the routine swing. In spite of the statements recently pushed forward it becomes necessary to impress the fact that no form of government can insure success. All that can be accomplished is to frame such a form of government as will permit of honest and efficient work and at the same time make due allowance for certain tendencies in human nature that need restraint. The remainder rests with the people themselves. They will then get as good government as they deserve. The commission government has not as yet demonstrated its final worth. The cities adopting it are too small to set any pace for the large communities, and those cities among them which have attained the size of 100,000 or more have operated under this form so short a time that it cannot for a moment be conceded that the benefits they may have obtained will prove permanent.